The Budget on 28 October 2026, the first under the new Prime Minister and John Healey’s first as Chancellor, left the rates of R&D tax relief unchanged and announced two changes to how claims are made. Companies making R&D claims on or after 1 April 2027 will no longer have to submit a Claim Notification Form, and the Additional Information Form will be simplified from autumn 2027. Alongside the Budget, HM Treasury opened a consultation on simplifying the corporate tax rules, R&D relief among them.
As with any Budget, there will be winners and losers. For R&D tax relief, the overriding message is one of welcome stability, with some common sense prevailing in how the relief is administered. After several years of significant change to the regime, the announcements point towards a simpler claims process and less unnecessary administration, while keeping the measures needed to protect the integrity of the scheme.
What has changed for R&D tax relief?
The government has announced two changes to the administration of R&D tax relief claims. Neither changes what qualifies as R&D or the rates of relief.
Removal of the Claim Notification Form
The government will remove the requirement to submit a Claim Notification Form for R&D claims made on or after 1 April 2027. The change will be made by amending the Corporation Tax Act 2009 in Finance Bill 2026-27, so it is subject to that legislation being passed.
Under the current rules, a company that has not made an R&D claim in the three years ending with its notification deadline, including any first-time claimant, has two options. It can notify HMRC by that deadline, or it can make the claim itself by then. The deadline is the last day of the six months beginning with the day after the period of account ends. For a company in that position, a claim made after the deadline without a notification is not valid, regardless of the qualifying R&D activities undertaken or the expenditure incurred.
The removal of this requirement is therefore a welcome development, particularly for start-ups and companies making their first claim, where awareness of the notification deadline may have been limited. The government expects around 26,000 businesses a year to benefit.
Simplification of the Additional Information Form (AIF)
The government also plans to simplify the Additional Information Form from autumn 2027, through changes to secondary legislation.
Introduced in 2023, the AIF asks companies for detailed information about their R&D activities, their qualifying expenditure and the projects behind the claim. It was introduced as part of HMRC’s wider efforts to tackle error and fraud in R&D tax relief, requiring companies and their advisers to provide greater transparency and supporting information.
The purpose behind the AIF remains sound, but completing it can be a considerable administrative exercise, particularly for companies with several R&D projects. The government has said it will simplify and rationalise the information the form requires, but has not yet said what will change. Further details will be needed to understand how the revised requirements will affect companies and their advisers.
Further simplification of R&D tax relief on the horizon?
Alongside these administrative changes, HM Treasury has published a consultation, Corporate Tax Simplification for Business Investment, on areas of the corporate tax system where targeted simplification could help. R&D relief is one of several areas in scope, with capital allowances, the Patent Box and the intangibles regime among the others.
On the R&D legislation, the government says stakeholders have already raised three areas, and it wants to hear further ideas:
- The ERIS intensity ratio. Whether a loss-making company qualifies for Enhanced R&D Intensive Support depends on its R&D expenditure as a proportion of its total expenditure. Some stakeholders consider the definition of total expenditure unclear. The expenditure of connected companies is added in, and some find the definition of “connected” hard to apply.
- The PAYE/NIC cap. The cap on payable relief has an exemption intended to support smaller, growing businesses, but it may not always apply where it should.
- Going concern status. Relief depends on the company being a going concern, but a company can lose that status for technical reasons while a viable trade still exists.
These are important areas, particularly for early-stage and research-intensive companies, where R&D expenditure can represent a significant proportion of overall operating costs. The consultation also covers the administration of claims, including the targeted advance assurance pilot, which the government says will inform future decisions.
No changes to these rules have been confirmed. The consultation is an opportunity to address some of the complexity that remains in the current regime and to make the rules more proportionate and accessible. The consultation sets out a programme of work rather than a list of questions. Between November and April, HM Treasury and HMRC plan to work with business through working groups and roundtables to refine the issues and test possible solutions. Detailed proposals for the highest-priority areas follow between May and September, with a final round of technical consultation ahead of a future fiscal event. Anyone who wants to take part should email ct.simplification@hmrc.gov.uk by 21 November 2026, setting out their areas of interest and expertise. The government does not guarantee a place in any particular group.
A welcome move towards a more balanced approach
Commenting on the announcements, Matthew Jones, Managing Director of LimestoneGrey, said:
“The decision to remove the Claim Notification Form is a sensible and welcome development. Since its introduction, we have been concerned about the impact this requirement could have on companies carrying out genuine R&D, particularly early-stage start-ups that may not have the resources or specialist knowledge to keep track of the administrative requirements of R&D tax relief.
“The reality is that companies undertaking genuine qualifying R&D could find themselves unable to claim relief simply because they were unaware of an additional notification deadline. Removing this requirement is a positive step towards making the scheme more accessible without compromising the underlying eligibility criteria.
“We will also be interested to see what changes are proposed to the Additional Information Form. It is important to remember why this requirement was introduced in the first place. The R&D tax relief sector has experienced significant challenges with non-compliant and, in some cases, abusive claims. Requiring businesses and advisers to properly document and explain the R&D activities being claimed was an important step towards improving standards and accountability.
“While we welcome measures that reduce unnecessary administration, we would not want simplification to undermine the progress made in improving compliance or create opportunities for the poor practices seen previously to return. The key will be finding the right balance between making the process more straightforward for genuine claimants and maintaining the standards that protect the integrity of the scheme.”
Do companies still need to submit a Claim Notification Form?
Yes, until the change takes effect. A company whose notification deadline falls before 1 April 2027 should notify by that deadline, even if it plans to file its claim after the change. A company with a year ending on 30 September 2026, for example, has a notification deadline of 31 March 2027, the day before the change, and should notify by then.
None of the announcements says how the change will treat a period whose notification deadline has already passed. Until the legislation is final, do not rely on it to rescue a missed notification. Our claim notification checker works out whether a company needs to notify and by when.
What does this mean for businesses claiming R&D tax relief?
For companies undertaking qualifying R&D, the announcements offer some welcome reassurance. After a period of substantial reform, the absence of further fundamental changes to the core regime gives businesses an opportunity to plan with greater certainty. It is, however, disappointing that the Budget did not increase the rates of R&D tax relief.
Businesses should continue to review their notification obligations, keep appropriate records of their R&D activities and expenditure, and make sure claims are prepared in accordance with HMRC’s requirements. The changes should make the administrative process more straightforward, but they do not alter the fundamental importance of identifying the scientific or technological advance sought, documenting the uncertainties addressed and making sure expenditure is correctly attributed to qualifying activities.
At LimestoneGrey, we welcome a more proportionate approach to R&D tax relief administration, one that supports genuine R&D while continuing to promote high standards of compliance. As further details emerge, we will continue to monitor developments and help businesses understand what the changes mean for their claims.
For further information, or to discuss your company’s approach to R&D tax relief, contact the LimestoneGrey team.
Sources
- Budget 2026: overview of tax legislation and rates, HM Treasury, 28 October 2026, section 1.47: legislation in Finance Bill 2026-27 to remove the Claim Notification Form “for R&D claims made on or after 1 April 2027”, and the AIF simplified from autumn 2027.
- Research and Development (R&D) tax reliefs: improving the customer experience, HMRC tax information and impact note, 28 October 2026: the operative dates, and the reasons given (“stakeholder feedback, and the reduced error and fraud risks now associated with the R&D regime”).
- Corporate Tax Simplification for Business Investment, HM Treasury consultation, 28 October 2026: paragraphs 2.16 to 2.21 (the timetable, and expressions of interest by email by 21 November 2026), paragraph 4.3 (around 26,000 businesses a year benefiting from the notification change), paragraph 4.8 (the three areas of R&D legislation) and paragraph 4.9 (the targeted advance assurance pilot).
- Budget 2026 speech, delivered 28 October 2026: the Chancellor’s “first Budget” and “our new Prime Minister”.
- Corporation Tax Act 2009, section 1142A: the claim notification period ends with the last day of the six months beginning with the day after the period of account ends.
- Corporation Tax Act 2009, section 1042C: a claim made after the notification period is barred unless the company notified, or made an R&D claim in the three years ending with the period’s last day.
- Tell HMRC that you’re planning to claim R&D tax relief, HMRC guidance: the current notification rules.
This article describes the rules as they stood at the review date above. The rules change: for the current position, start with our guides or talk to us.
